The Copyright Royalty Board has voted to maintain the existing rate of the royalty payments paid to music publishers and songwriters.
The National Music Publishers Association had asked the board to increase the royalty payment to 15c per song from the existing 9.1c per song, a rise Apple claimed in a submission could force it to close the iTunes music store.
The board didn’t deliver good news exclusively however, setting a rate of 24c for ringtones, the first time ringtones have had a mandate rate, and an amount significantly higher than asked for by all parties.
The good news from the decision is that Apple is not going to close the iTunes music store, which many sites have reported was a strong possibility because that’s what Apple argued in its submission. It’s a great line, but it was bollocks: Apple was never going to close the store, it was simply a tactic used to pressure the decision.
Apple was not going to cut off a music store that has been an integral part of its domination of the MP3 music player space, certainly not due to a 9c rise, or even more. They may have protested that the market would only have accepted 99c singles, but they weren’t about to damage a product line (the iPod) that accounted for 42% of Apple’s revenue in the first quarter of 2008. Apple would have worn the cost, by increasing the price of music sold, or absorbing the hike as a subsidy towards maintaining its 75% market share.